Judge rules for Wisconsin insurer in 17 COVID-19 BI cases

A Chicago judge ruled in favor of a Wisconsin insurer in 17 separate COVID-19-related business interruption cases this week.

Decisions issued by Judge Moshe Jacobius of Cook County Circuit Court in Chicago included Tuesday’s Station Two LLC, d/b/a Firehouse Grill et al. v. Society Insurance Inc., which was filed by a group of restaurants against Fond Du Lac, Wisconsin-based Society Insurance Inc.

As with other rulings that have gone against policyholders, Judge Jacobius said the plaintiffs in the case have not established the direct physical loss required by the coverage.

“The Court does not find any ambiguity in the Policies regarding  ‘direct physical loss or damage to covered property,’ which triggers coverage. Plaintiffs urge this court to find the SARS-CoV-2 particles cause ‘direct loss of’ or ‘damage to’ property; but the Court is not persuaded,” the ruling said.

“Since the existence of the particles is not visible to the naked eye and cannot be seen or felt, any purported damage is not ‘physical in nature,” it said.

Judge Jacobius said he disagreed with the Feb. 22 ruling by Judge Edmond E. Chang of the U.S. District Court in Chicago, who refused to dismiss multidistrict COVID-19 business interruption litigation filed against Society Insurance.

Judge Chang’s opinion “found only a genuine issue of material fact as to whether a reasonable jury could find physical loss of the use of the property can trigger coverage,” the ruling said.

“Additionally, most of the litigation in the United States District Court of Illinois as well as other cases in the Circuit Court of Cook County found no coverage under the insurance policy because ‘plaintiff(s) ha(ve) not pled any factors showing physical alteration or structural degradation of the property,’” the decision said in citing an earlier ruling and granting the insurer’s motion to dismiss the case.

Society Insurance attorney Laura A. Foggan, chair of the insurance/reinsurance group of Crowell & Moring LLP in Washington, said in a statement, “We are gratified that the Illinois court correctly applied the terms of the Society policies in each of these cases.”

The statement said, “While these times are undeniably challenging for many of Society’s policyholders, and all businesses impacted by the pandemic, the present circumstances do not alter the terms of Society’s insurance contracts or create insurance coverage for losses that fall outside those contracts’ terms.”